Baxter divests biopharma business to PE group for $4.25bn

BY Fraser Tennant

In a deal designed to accelerate its clinical development pipeline and drive product innovation, global medical technology company Baxter International Inc. is to divest its biopharma solutions (BPS) unit to a private equity consortium comprising Warburg Pincus and Advent International.

Under the terms of the definitive agreement, Baxter will receive $4.25bn in cash, subject to certain closing adjustments, with net after-tax proceeds currently estimated to be approximately $3.4bn.

As a standalone company and in partnership with Advent and Warburg Pincus, BPS – a provider of sterile contract manufacturing solutions, parenteral delivery systems and customised support services to the pharma and biotech industries for decades – will operate as a premier, independent end-to-end contract development manufacturing organisation providing a range of services for clients, from clinical research to commercial deployment.

The transaction includes BPS manufacturing facilities and approximately 1700 employees in Bloomington, Indiana and Halle, Germany. The deal is also expected to generate revenues of approximately $600m for 2023.

“This transaction represents an important step in Baxter’s ongoing transformation journey as we continue to execute against our strategic priorities, enhance our focus and create additional value for all our stakeholders,” said José E. Almeida, chairman, president and chief executive of Baxter. “BPS has long been recognised worldwide as a trusted and preferred partner of contract manufacturing services for the pharmaceutical and biotech industries.”

Following completion of the transaction, Baxter expects BPS to be well-positioned to accelerate its go-to-market strategy and clinical development pipeline, execute on throughput expansion and drive further product innovation.

“BPS is a premier asset at the forefront of the biopharma industry, and one we have been closely following for a number of years,” said John Maldonado, a managing partner at Advent. “Leveraging our deep sector expertise and significant strategic resources, we believe this partnership can unlock multiple opportunities for growth and help the business realise its full potential.”

TJ Carella, managing director and head of healthcare at Warburg Pincus, added: “We are excited to partner with Advent and the impressive team at BPS who have developed differentiated technical capabilities and established an industry-leading reputation for quality and reliability in the supply chain for parenteral drugs.”

The transaction is expected to close in the second half of 2023, subject to receipt of customary regulatory approvals and satisfaction of other customary closing conditions.

Mr Almeida concluded: “I am confident that under the stewardship of Advent and Warburg Pincus, BPS will continue to build on its leadership position, foster world-class talent, invest in new capabilities and capacity, and provide leading-edge, high-quality solutions for its clients.”

News: Baxter to divest biopharma business for $4.25 billion

Bittrex bankrupt

BY Richard Summerfield

Cryptocurrency exchange Bittrex Inc has filed for Chapter 11 in the US Bankruptcy Court for the District of Delaware, just weeks after the company was accused of operating an unregistered securities exchange by the US Securities and Exchange Commission (SEC).

At the end of April, Seattle-based Bittrex halted its US operations and noted that its international customers, which are served by its global platform based in Liechtenstein, would not be impacted by its US bankruptcy. Bittrex, which was founded in 2014, said it has more than 100,000 US-based creditors. Its estimated liabilities are between $500m and $1bn, according to the court filing. The US Treasury’s Office of Foreign Assets Control (OFAC) emerged as the company’s largest creditor, with a substantial claim exceeding $24m.

In mid-April, the SEC sued Bittrex on allegations it operated a national securities exchange, broker and clearing agency. The SEC also sued former Bittrex chief executive Bill Shihara and Bittrex Global. Oliver Linch, chief executive of Bittrex Global. said last month that the exchange intended to fight the charges in court, but a bankruptcy proceeding may make this more difficult.

“Having previously announced that Bittrex, Inc. would be ceasing all operations in the U.S. effective April 30th, we have now made the decision to file Chapter 11 bankruptcy in federal court in Delaware,” said Bittrex in a statement announcing the bankruptcy filing. “This announcement does not impact Bittrex Global, which will continue operations as normal for its customers outside the U.S.

“For those customers who did not withdraw their funds from the platform prior to the end of April, your funds remain safe and secure, and our main priority is to ensure that our customers are made whole. While the Bankruptcy Court will ultimately decide the method by which those funds can be claimed by and distributed to our customers, we intend to ask the court to activate those accounts as soon as possible so that customers meeting the necessary regulatory requirements will be able to withdraw them,” he added.

In filings made at the Delaware Court, Evan Hengel, the co-chief restructuring officer of Bittrex, said that customers would get a “100 percent like-kind cryptocurrency distribution” under its liquidation plan, enabling them to access the Bittrex platform and withdraw their funds.

News: Crypto exchange Bittrex files for bankruptcy after SEC complaint

Lannett Company files for Chapter 11 bankruptcy

BY Richard Summerfield

Generic drug manufacturer Lannett Company has filed for a prepackaged Chapter 11 bankruptcy in the US Bankruptcy Court for the District of Delaware.

On 1 May, the company announced it had agreed to a restructuring support agreement (RSA) with holders of more than 80 percent of its 7.750 percent senior secured notes and 100 percent of the lenders party to the company’s second lien credit and guaranty agreement. The RSA will see the company seeking to significantly improve its financial position by eliminating approximately $597m of funded debt, including $511m of secured debt, through conversion of the secured debt into equity in the newly reorganised company.

Lannett, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications.

“The significant support of our debtholders and other stakeholders demonstrates their confidence in the Company’s business plan and Lannett’s long-term strategy,” said Tim Crew, chief executive of Lannett. “Commencing our Chapter 11 cases is an important step toward strengthening our financial position, and we intend to move through this process quickly and without disruption for our customers and partners. We believe that implementing these transactions will enable us to continue manufacturing and producing safe, life-enhancing, and affordable generic pharmaceutical medicines.”

The company expects to continue to operate throughout the Chapter 11 process. The RSA and the prepackaged plan provide for vendors, employees and other partners to be paid in the ordinary course of business for obligations incurred prior to and after the commencement of the Chapter 11 cases. Lannett said it had sufficient liquidity to operate its businesses, including the payment of all such obligations. It expects to move through the process seamlessly, emerging as a stronger company better able to build for the future.

In April, Lannett was removed from the New York Stock Exchange (NYSE) after it fell below the continued listing standard requiring listed companies to maintain an average global market capitalisation of at least $15m over a consecutive 30-trading day period.

In December 2022, Lannett announced plans to close two research and development centres in Philadelphia, as well as eliminate 64 jobs, about 11 percent of its workforce. In a filing to the Pennsylvania Department of Labor and Industry, the company said these decisions were made in order “to streamline and realign our operations to ensure the continued progression of our existing pipeline and future growth”. The company said the facilities would be closed by 30 June 2023.

News: Generic Drugmaker Lannett Files for Chapter 11 Bankruptcy

Eli Lilly to divest diabetes drug to Amphastar in $1bn deal

BY Fraser Tennant

In an effort to continue expanding the availability of diabetes drug Baqsimi to patients, US pharmaceutical company Eli Lilly and Company is to divest the drug to Amphastar Pharmaceuticals, Inc. in a transaction worth up to $1.08bn.

Under the terms of the definitive agreement, Amphastar will pay Lilly $500m in cash at closing and an additional $125m in cash upon the one-year anniversary of closing. Eli Lilly is also eligible to receive sales-based milestone payments of up to $450m in aggregate.

Launched by Eli Lilly in 2019 as an option to quickly render aid in rescue situations for people with diabetes who take insulin, Baqsimi is currently available in 27 international markets, with worldwide sales totalling $139.3m in 2022. It is the first and only nasally administered glucagon for the treatment of severe hypoglycaemia in people with diabetes.

“Our portfolio of therapies continues to make life better for people with diabetes, and we will continue this important mission while also increasing our focus on advancing our pipeline of potential breakthrough treatments,” said Mike Mason, executive vice president of Eli Lilly & Company. “Baqsimi’s positive impact has been felt by people with diabetes around the globe and we are working closely with Amphastar to facilitate a successful transition and consistent patient experience.”

The transaction has been approved by the boards of directors of both companies.

“The acquisition of Baqsimi will integrate our core strategic vision of strengthening our proprietary products profile in addition to enhancing our diabetes portfolio offering,” said Jack Zhang, president and chief executive of Amphastar. “We are optimistic about Baqsimi’s growth potential as it is the first and only commercial intra-nasal glucagon demonstrated to treat low blood sugar emergencies.”

A global pharmaceutical company focused on developing, manufacturing and marketing injectable, intranasal and inhalation products, including experience with a glucagon product, Amphastar expects to provide dedicated commercial investment for Baqsimi with the goal of enabling more people on insulin to be prepared with a glucagon rescue treatment for severe hypoglycaemia.

The transaction is not subject to any financing conditions and is expected to close in the second or third quarter of 2023, subject to the satisfaction of customary closing conditions.

News: Eli Lilly to sell low blood sugar drug to Amphastar for around $1 billion

Carrier to acquire Viessman unit in €12bn transaction

BY Fraser Tennant

In a deal envisaged to create a global leader in intelligent climate and energy solutions, air conditioner maker Carrier Global Corporation is to acquire a unit of German industrial manufacturer Viessmann.

Under the terms of the acquisition agreement, Carrier will acquire Viessmann Climate Solutions, the largest segment of Viessmann Group, in a cash and stock transaction – 80 percent cash and 20 percent in Carrier common stock – valued at €12bn.

A privately held company with a 106-year legacy of innovation, Viessmann Climate Solutions provides Carrier with an iconic, premium brand in the highest growth segment of the global heat pump and energy transition markets.

Moreover, with 70 percent of its business consisting of heat pumps and related accessories, solar PV, batteries and services, Viessmann Climate Solutions is a critical leader in Europe's energy transition.

“The acquisition of Viessmann Climate Solutions is a game-changing opportunity,” said David Gitlin, chairman and chief executive of Carrier. “Climate change, sustainability requirements and geopolitical factors are driving an unprecedented energy transition in Europe. Accelerated by government regulations and incentives, the transition creates a significant, long-term growth opportunity.”

As part of the transaction, Max Viessmann, chief executive of Viessmann, will join Carrier’s board of directors.

“Our purpose is to create living spaces for generations to come,” said Mr Viessmann. “Carrier's global reach, broad product portfolio, financial strength and shared commitment to sustainability will enable our climate solutions business to fully capitalise on our innovative, integrated solution offering and maximise our impact on Europe's independent energy transition.”

The transaction has been approved by the boards of directors of Carrier and Viessman and is expected to close around the end of 2023, subject to customary closing conditions and regulatory approvals.

Mr Gitlin concluded: “We are positioning ourselves to be the global climate solutions champion, poised to deliver higher growth and superior shareowner value.”

News: Carrier nears over $12 bln deal for German manufacturer Viessmann